A common client inquiry we receive is in the context of someone negotiating with Gartner. Our clients want to know why in the midst of a terrible economic downturn, when vendors are cutting budgets left and right, that Gartner does not exhibit greater flexibility (i.e., cut prices) when it comes to contract negotiations. The short answer is that due to its end-user advisory market dominance – we estimate that Gartner has ~70% of the end user contracts – it does not have to be flexible.
However, this issue is a little more complex than slapping a “monopolist” tag on folks over on Top Gallant Road. The reality is that there is an effective duopoly with tacit partner Forrester which gives them both the flexibility to be inflexible with it comes to negotiations. The last time this market saw pricing and packaging that in anyway favored the buyer was the mid-90’s when Giga and later META used significantly lower prices and “all you can eat” research seats to take market share from Gartner and Forrester. Alas, today there are no such firms that can play that role to counter Gartner and Forrester. As a consequence, the Big Two’s CEOs habitually inform Wall Street that they are maintaining their pricing and discounting discipline.
However, it is possible to reduce spending – notice we did not say “save money” – with the Forrester / Gartner duopoly without damaging the ability to access analysts for influencing purposes. However, it is not as simple as trying to wrangle a better discount from the sales rep. Rather it takes:
- Knowledge about the firms’ business models
- Knowledge about the firms’ research methodology and analyst culture
- Knowledge about the true business value of Forrester’s and Gartner’s service offerings
- Insights from tracking all the interactions the firms’ have with Wall Street and investors (e.g., earnings calls, investor days and participation in financial analyst conferences)
- Intelligence from AR managers around the industry
- Experience as contract negotiators
- The right attitude (i.e., all business is personal, but don’t take it personally)
SageCircle has all of the above bullets covered, which is why how to go about negotiating with Forrester and Gartner is such a common inquiry from our clients. SageCircle has developed a flexible – and currently unique – packaging and payment framework that permits vendors and IT managers to acquire the services that makes sense for their particular situation. As a consequence, buyers of Forrester and Gartner services (e.g., analyst relations, market researchers, procurement managers, corporate librarians and IT managers) can purchase as little as two hours of Advisory time to obtain insights and advice that will help them maximize analyst contracts while minimizing expense. Click on SageCircle advisory options to learn more about how SageCircle can help you reduce your analyst contract spend.
SageCircle Advisory and Online SageContent Library clients have received a SageInsight with practical and actionable recommendations for negotiating with the Forrester and Gartner duopoly.
Bottom Line: It is possible to reduce the spending with Forrester and Gartner, but traditional negotiating techniques are not effective. Rather, negotiators need to take into account changes in the marketplace and deep insights into the analyst firms’ business models to prevent wasting money on contracts with the Big Two duopoly.
Question: End user and vendor clients of Forrester and Gartner – Have either firm exhibited recent flexibility in pricing and packaging during contract negotiations?